Last Name 1 [Name] [Course Title] [Instructor Name] [Date] Organization Theory

1. What role can top management of an organization play in changing the organization in turbulent environment? There comes a time for all companies large or small when they are rigorously put to test by the market and it is how they react to it that determines their ultimate fate. Many companies like the infamous Enron have only themselves to blame for their ill-timed demise. The top management has various critical roles. When all these roles are carried out by the right persons the top management can surely deal with turbulent environment. Such roles have been characterized by Henry Mintzberg as Interpersonal roles(Figurehead, Leader & Liaison) dealing with and motivating staff and all levels of the organization, Informational roles( Monitor, Disseminator & Spokesperson) acting as a source, receiver and transmitter of information and Decisional Roles( Entrepreneur, Disturbance handler, Resource Allocator & Negotiator) taking decisions and allocating resources to meet the organizations objectives. A sub duty of performing Decisional role is Disturbance handler which states the response to changing business situations and assuming responsibility when threatening factors develop as stated in The Nature of Managerial Work.

Last Name 2 When in turbulent environment, the time requires the top management to be strict and to remain in action. Therefore after the top management has understood all their roles mentioned above, the top management is demanded by time to adopt an autocratic style of Leadership in times of crisis and pay less heed to employees motivation and get things moving on quickly. This style strongly refutes suggestions from bottom level staff and only dictates orders which are expected to be acted upon quickly. In times of crisis all other modes of democracy, paternalistic and laissez faire attitude must be abandoned. The top management must quickly initiate a strategic analysis to determine the main source of the problem in order to formulate an effective counter strategy. PEST (Political, Environmental, Social and Technological) Analysis would be good tool to determine the change in market condition other than rival firms. Any significant new business strategy should be preceded by a detailed analysis of the wider environment in which the strategy has to operate and be successful. The use of PEST analysis formalizes this process and the results of the analysis should be an important part of strategic decision making. Second Analysis based on framework proposed by Michael Porter who suggests 5 factors that influence an industry. Its main focus is competitive rivalry that exists in an industry and its effect on the business. Factors effecting (1)competitive rivalry are (2)Barriers to Entry which would be effected by economies of scale, switching costs, startup costs and capital requirements etc; (3) Supplier Power which is determined by differentiation of inputs and impacts of its cost, presence of substitute inputs and threats of forward integration. (4) Buyer Power which linked to customer power and are again affected by product differentiation, their cost of switching to other suppliers, their

Last Name 3 bargaining leverage and the threat of backward in integration. The final factor is (5) Threat of Substitutes which relates to potential rivals from another industry and this would greatly determined on technology advancement and customers preference for these rivals. One critical drawback is however is that this model can become very complex when trying to analyze many modern industries joint ventures, multiple product groups and different market segments within the same industry which have their own competitive forces. After conducting these analysis a strategic choice must be put into effect which is again thoroughly verified by various techniques such as force-field analysis or decision tree. Force Field Analysis gives weightage to each of the adverse and favorable outcomes of a strategic choice in order to conclude the overall nature of impact of the choice of the decision. Decision tree brings probability into play and portrays the chances of an event occurring for every decision taken along the road. Both models are only tools to forecast all possible outcomes. But there is absolutely no guarantee of all outcomes occurring and unexpected events can happen. The top management would have mammoth decisions to enforce like launching redundancies in times of recession which again must be assessed to be done effectively due to various techniques like voluntary dismissals, golden hand shake schemes and assurance to hire back once market situation has improved. It must asses which outlets to close down or products to withdraw and how to counter vicious promotion campaign by rival firms? The top management would also responsible in conducting investigations into fraud and performance appraisal to sack managers and workers contributing to damages caused to the company. It would also asses the sources of finance available to it and accordingly arrange capital or loan for itself in order to

Last Name 4 survive any cash flow problems and to maintain credit confidence the suppliers place on the company. Ultimately the organization must centralize all decision making in times of crisis or delegate extraordinary power to head of regions to take quick decisions to tackle crisis on region to region basis.

2. Why are some organizations, for example, (Kodak, HP, Nokia), not able to adapt to changes in the global economy? Still many companies have failed to adapt to changing global market environment and as a consequence have not only suffered huge loses but also lost their image as brand leader and are still struggling to compete with new emerging brands. The problem with each company varies with the industry it operates in.

Once global photo giant, Kodak now presents a pitiful image as described by Jim Fisher: Kodak announced today that it is filing for Chapter 11 bankruptcy protection. This does not come as a surprise to anyone who has been paying attention to the company's financial situation. Its stock has fallen in price to a point where it is in danger of being de-listed by the New York Stock Exchange, and several members of its board of directors have resigned in recent months. So what went wrong? Kodak wasnt able to estimate the potential that digital revolution holds in the 1980s and was paying attention on purchasing pharmaceutical giant Sterling Drugs for $5.1billion and

Last Name 5 also trying luck in the batteries business. This adventure was a horrible mistake as in no less than six years of acquisition Kodak was selling off all Sterling divisions. They were also easily defeated by Duracell and Eveready in the batteries sector and earned massive losses. Almost all critics agree that barriers to change were the main cause of Kodaks downfall. Even the cell-phone giant Nokia posted a loss of $1.27 billion for the third quarter, as on its interim report, as it failed to asses customers anticipations for handsets having advanced version of operating software. The Nokia Lumia series smartphones were equipped with Windows 7.5 and cannot be upgraded, a feature that might have rescued the lineup. The consumer market was waiting for handsets equipped with Windows 8 that Microsoft announced to release this year. Here the failure was on forecasting consumers response and also perhaps the partnership with Microsoft as since february 2011, the month when the joint venture was initiated, Nokia has posted losses exceeding 4 billion euros. In contrast its rival Apple solely depends on designs and software created within its domain and enjoying complete control over the operations of its smartphones which are in comparison easily maneuvered to suite consumer taste. Once computer giant HP (Hewlett-Packard), is now proving way too large to be governed efficiently. It has over 300000 employees and $120 billion of revenue which pictures its massive size. Dont let the revenue figures fool you as HPs acquisition figure is only around $8.8billion. It is currently struggling by pursuing both commodity system business and enterprise service business which both require different approach due to entirely poles apart characteristics. Commodity business requires low cost and intensive distribution technique through multiple channels with constant introduction of new

Last Name 6 innovations. Where as the Enterprise system requires massive investment in Research and Development which generates refined softwares able to cope with customers exclusive need in order for them to experience high quality service. This is supplemented by outstanding after-sale services.

3. Identify and discuss two organization changes that will affect how you will work in ten years. We would adopt a Kaizen approach to improve efficiency levels, staff motivation and adequate response to changes in market conditions. Kaizen or Ky zen is a Japanese term which simply means continuous improvement. The Kaizen philosophy suggest that, in many cases, workers actually know more that managers about how a job should be don or how productivity might be improved. (Stimpson & Farquharson 445). It would therefore, have our company to involve staff indecision making more seriously than before. We would also need to introduce team working and cell production techniques to provide greater autonomy to groups responsible for the final output for in our case our heavy bikes. However it would not be an easy process as some senior managers still need convincing that this program would not take away authority from their hands. Also Kaizen is known to bear fruits in the early stages but after a long-period the improvement may prove to be intangible. Accordingly there will be substantial capital costs in the early stages to make large scale improvements and that would require exploration for further sources of finance. Also we would be adopting the principles of Corporate Social Responsibility

Last Name 7 (CSR) to improve our market image and form basis of devising long-term business strategy. A CSR principle makes it an aim for a company to take in account concerns of all external stakeholders when making decision. CSR would get our company more involved with our external stakeholders in order to release outside pressure on the business and provide a more co-operative environment with our dealers and authorities. This policy would allow our management to actively take part in investing in programs meant for social uplifting which would subsequently improve our brand image further and give us a competitive edge. Companies adopting CSR have also reported an improvement in number and quality of applications they revenue from potential recruits. This initiative will direct our engineers to design even more eco- friendly and fuel efficient motor bikes in order to contribute towards a more greener world. These two factors would greatly influence our companies decision making for the next 10 years or so and would also require changes in the organizational structure in order to gain maximum benefit. Kaizen would go along a long away to help us keep changing our operational methods and eliminate barriers to change which have been cause of fall of many prestigious brands who have found no U-turn yet. Conclusion

The modern era is changing fast. With every passing decade changes occur those took centuries. This is because the environment to promote and accept changes has flourished immensely and the organizations all around the world have learned about it the by the easy and the hard way. However steps towards change must be calculated and all efforts must be done to mitigate potential losses. Companies no matter where they stand

Last Name 8 must continue to improvise and adapt as climbing back to the top has proved to be a very, very steep hill to conquer. The time demands promotion of a co-operative relationship among all the stakeholders of a business and only those will bear fruit from this cooperation who understands the potential it holds and seriousness of the consequences.

Last Name 9 Work Cited Mintzberg, H The Nature of Managerial Work Harpercollins College Div, 1973.

Pcmag Jim Fisher January 19 2012 What Kodak Needs to Do to Survive . 30th November 2012 <http://www.pcmag.com/article2/0,2817,2399100,00.asp>

Stimpson, P and Farquharson, A Cambridge International AS & A Level Business Studies 2nd Edition Cambridge University Press: Cambridge, 2010